Offering employees a salary sacrifice electric vehicle scheme really is a win-win situation. It costs you nothing (and could potentially actually save you money!) yet is an amazing perk that rewards employees and provides a great incentive for potential new recruits, all whilst boosting your business’s environmental goals!
So how does the scheme work and why is it such a great option for businesses, employees and the self-employed? Let’s take a look at how it all works.
Electric vehicle salary sacrifice scheme
Reducing our environmental footprint and being more sustainable is important to everyone right now – employees and employers alike. And the electric vehicle salary sacrifice scheme is a highly rewarding, cost-effective and tax-efficient way to do this. The government-subsidised scheme enables employees to lease an electric vehicle through their employer at a fraction of the price that it would usually cost by sacrificing this from their salary – before tax!
Using a salary sacrifice scheme for electric vehicles does involve a Benefit in Kind (BIK) tax, but at just 2% for the 2022–2023 year, this still remains a hugely tax-efficient benefit. Often the lease will include various other car-related costs too, such as insurance, road tax and servicing, all of which is another brilliant incentive.
What are the benefits of offering a salary sacrifice scheme?
The scheme holds many benefits for both employees and employers:
For your employees
- No upfront costs
- Can save anywhere between 30–60% on the cost of the lease
- Cheaper running costs, with fuel-per-mile costs for electric vehicles significantly less than petrol and diesel cars
- Reduces income tax and National Insurance contributions
- Provides a much more affordable way to switch to an electric vehicle
For your business
- Costs you nothing!
- Helps your business reduce its carbon footprint and reach its environmental targets
- Provides a brilliant perk for both new and existing employees
- Has the potential to reduce National Insurance contributions
Salary sacrifice calculator
Comcar has a really handy customisable calculator that you can use to give you a general insight into how a salary sacrifice scheme could work for both you and your employees. Visit the Comcar website to learn more.
Seek an accountant’s advice
How do you know if a salary sacrifice scheme is really the right decision for your business? And is there complicated paperwork involved? Talk to our accountants! We’ll discuss the benefits (and any potential downfalls) of the scheme to help you make an informed decision that’s right for your business.